Once again the minimum pension under the EPFO-backed employees' pension scheme (EPS) is trending. Expectations of a hike in the EPS pension from Rs 1,000 by Diwali have heightened. However, by how much could the government hike the minimum pension under EPS? Earlier, hopes were that the EPS pension could rise to over Rs 7,000, however, now many are expecting Rs 2,500 to be the new minimum pension.
EPS-95 Minimum Pension:
At present, the minimum pension under the Employees Pension Scheme (EPS), 1995, is fixed at Rs 1,000 per month. This has been in place since September 2014.
The minimum pension under EPS has not been revised since 2014, which is over a decade now. Pensioners and the employees' union have been seeking an increase in pension from Rs 1,000, while the government is notified about the expectations and the topic has been brought in Parliament houses.
EPS Minimum Pension To Rs 7,500?
In the early months of 2025, the majority of reports and employees had recommended the hike to Rs 7,500 in minimum pension. But the government has been bearing deficit due to the minimum pension under EPS and hence, a huge hike is unlikely!
During a Rajya Sabha sitting, Minister of State for Labour and Employment Shobha Karandlaje highlighted, "Representations have been received from various stakeholders, including trade unions and public representatives, to increase the minimum pension under the Employees' Pension Scheme (EPS), 1995, from the existing Rs. 1000/- per month."
He explained that the EPS, 1995, is a "Defined Contribution-Defined Benefit" Social Security Scheme.
As of now, the corpus of the EPS is based on (i) contribution by the employer at 8.33 per cent of wages and (ii) contribution from the Central Government through budgetary support at 1.16 per cent of wages, up to an amount of Rs 15,000 per month.
Hence he added, "All benefits under the scheme are paid out of such accumulations. The fund is valued annually as mandated under paragraph 32 of the EPS, 1995, and as per the valuation of the fund as on 31.03.2019, there is an actuarial deficit"
Despite the actuarial deficit, the minister pointed out that "However, the Government is providing a minimum pension of Rs. 1000 per month to the pensioners under the EPS, 1995 by providing budgetary support, which is in addition to the budgetary support of 1.16 per cent of wages provided annually towards EPS to Employees' Provident Fund Organisation (EPFO)."
That being said, the chances of the minimum pension being hiked to Rs 7,500 are unlikely.
EPS Minimum Pension Hike To Rs 2,500:
There is a likelihood of raising the minimum pension amount from Rs.1,500 to Rs.2,500. This has been a long-pending demand of the trade unions because of rising living costs. The EPFO Central Board of Trustees seems to have finally decided to address their demand, as per HDFC Sky blog.
Also, earlier EPFO revealed that although a High-Level Monitoring Committee had recommended increasing the minimum pension to Rs 2,000 and submitted the suggestion to the Finance Ministry, it was not accepted. EPFO revealed this in a reply to a query on June 18.
EPFO Upcoming October Meeting:
The Central Board of Trustees (CBT) of the Employees' Provident Fund Organisation (EPFO) is reportedly expected to meet between October 10th to October 11th. The meeting is expected to take place in Benaluru, and will be chaired Union Labour and Employment Minister Mansukh Mandaviya.
Several benefits in employees provident fund (EPF) accountholders is expected to be announced, which would likely boost household consumption ahead of the mega festival Diwali.
Among the agendas is a comprehensive upgrade of EPFO to offer seamless transactions in EPF and EPS accounts. The EPFO portal is expected to be revamped. For this, major tech companies such as Infosys, TCS, and Wipro were shortlisted.
Under 3.0, it is expected that financial transactions such as partial withdrawal through ATMs or UPI. Another big announcement expected is in regards to hike of minimum pension under EPS 1995.
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